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Shutdown a Step Closer as Senate Kills House Bill

WASHINGTON -- The Senate voted Friday morning to reject the House's stopgap spending bill, less than 12 hours after the House's Republican leaders had forced it through on their second try.

The Senate vote was 59 to 36 to table the House bill, effectively killing it. Some conservative Republicans joined in rejecting the measure.

The House, in the wee hours of Friday morning, had passed its latest version of a stopgap spending bill after rejecting on Wednesday a nearly identical version of the legislation, which is needed to keep the government open after Sept. 30 and to provide assistance to victims of natural disasters. The House vote was 219 to 203.

House Republican leaders, trying to recover from a humiliating political defeat, had made one change in the bill -- but it was one that most Democrats in the House and Senate opposed, trimming green energy loans. The new version would offset more of the cost of disaster assistance by rescinding $100 million from an Energy Department program that guaranteed a loan for Solyndra, the solar equipment manufacturer that filed recently for bankruptcy protection.

The bill, to finance government operations for seven weeks after the start of the fiscal year on Oct. 1, had faced problems in the Senate, where Democrats want to spend more without cutting other programs to offset the cost.

Senate Democratic leaders had said all along that the House version would be swiftly rejected in the Senate, which had already passed a version of its own. Indeed, the senators acted even before the House version had formally arrived for their consideration.

"The House bill is not an honest effort at compromise," said the Senate majority leader, Harry Reid, Democrat of Nevada. "It fails to provide the relief that our fellow Americans need as they struggle to rebuild their lives in the wake of floods, wildfires and hurricanes, and it will be rejected by the Senate."

Mr. Reid said he had hoped that House Republicans would move toward the middle. "Instead," he said, "they moved even further toward the Tea Party."

It is not clear how the two houses will overcome the impasse and avert a government shutdown. Most federal agencies need money to continue operations beyond Oct. 1. The disaster relief fund of the Federal Emergency Management Agency is running short of money. And lawmakers are planning to leave town for a recess scheduled for next week.

House Republican leaders, who lost control of their caucus on Wednesday, worked furiously on Thursday to round up votes for the revised version of the stopgap bill.

They prevailed by halving the number of defections from their ranks. On Wednesday, 48 Republicans voted against the bill. On Friday, just 24 voted no. Representative David Dreier, Republican of California and chairman of the Rules Committee, said it had been "an ugly, messy, difficult process." The purpose of the change, he said, was to prevent "another boondoggle like Solyndra."

The new version of the House bill, like the original, would have partially offset the cost of disaster assistance by cutting a separate Energy Department loan program that promotes development of energy-efficient cars. This cut infuriates Democrats in the House and the Senate, who say the program is creating thousands of jobs at automakers and auto parts suppliers.

"The bill was wrong yesterday, the bill is wrong today," Representative Louise M. Slaughter, Democrat of New York, said Thursday night on the House floor. "Virtually nothing has changed."

The House Democratic leader, Nancy Pelosi of California, said Republicans were offering "the same old warmed-over stew that was rejected" on Wednesday.

Speaker John A. Boehner had solicited the views of his colleagues at a meeting of the House Republican Conference, where lawmakers expressed frustration at the setback they suffered Wednesday on the bill to provide $3.65 billion in disaster relief.

In an effort to win over fiscal conservatives, Mr. Boehner told members of his caucus that the bill defeated Wednesday was the best deal they were going to get. Representative Greg Walden, Republican of Oregon, who voted for the original bill, said: "If you are a conservative, it just gets worse from here. The Senate wants to spend a lot more."

The Senate last week approved a bill that includes $6.9 billion of disaster assistance, nearly twice as much as the House bill.

Four dozen House Republicans defied party leaders and voted against the original bill. Many said they wanted deeper cuts in overall spending. Representative Louie Gohmert, Republican of Texas, said he had to stay true to his constituents.

"We promised that we would make serious cuts," Mr. Gohmert said as he left the party caucus on Thursday. "We have not made serious cuts. I have to see serious cuts so I can keep my commitment to the people who elected me."

Representative Peter T. King, Republican of New York, said it was imperative for the House to act swiftly, to address the pressing needs of disaster victims and to minimize the political risks to Republicans.

"Delay puts this on the Democrats' playing field," Mr. King said. "If there is a threat of a government shutdown or if there is a threat of people not getting disaster assistance, we are on the defense."

"I've always believed in allowing the House to work its will," Mr. Boehner said Thursday. "I understood what the risk was yesterday. But why not put the bill on the floor and let the members speak? And they did."

Representative Marcy Kaptur, Democrat of Ohio, said Republicans were engaged in "a cynical ploy to set disaster victims against unemployed autoworkers," who could benefit from the clean car program.

The fight over the stopgap spending bill came as a powerful House-Senate committee weighed options for sweeping changes in individual and corporate taxes. Committee members from both parties said they wanted to lower business tax rates and eliminate or curtail some tax deductions and other tax breaks used by corporations.

"We don't collect as much revenue as we should, due in part to the complex, inefficient and loophole-ridden tax code we've got," said Senator Rob Portman, Republican of Ohio. "Most economists agree that fundamental corporate tax reform is going to produce more economic growth and therefore, as a consequence, more revenues."

Senator Max Baucus, Democrat of Montana and chairman of the Senate Finance Committee, said, "I think we should lower our corporate rates very significantly." But he said such changes would cause "big dislocations," as "some industries would be hurt a lot" while others would benefit.

But she said, "It's important to coordinate reforms for individual and corporate taxes," because many businesses operate as "pass-through entities" and their income shows up on individual income tax returns.

How lawmakers could agree on huge changes in the tax code -- when they could not agree on a bill to finance the government for just seven weeks -- remained a mystery.

Correction: September 23, 2011

An earlier version of this article misspelled John Boehner's surname as Borehner at one point.

A version of this article appears in print on September 23, 2011, on page A24 of the New York edition with the headline: House G.O.P. Tries to Regroup on Spending Bill. Order Reprints|Today's Paper|Subscribe